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Oil price fall slashes forecasts for GCC economies – Report

Oil price fall slashes forecasts for GCC economies – Report
Photo Credit: Arabianeye - Reuters

Kuwait – Mubasher: The decline in oil prices led to lowering economic forecasts for GCC states, said Asia Investment in its weekly analytical report.

Energy-related production in Qatar, Saudi Arabia and Oman ranges between 40% and 50% of total output, it added.

Meanwhile, the UAE and Bahrain are among the lowest in terms of correlation with the oil sector with 30% and 10% of total production in a row.

However, Kuwait faces the biggest threat, given that 60% of its gross domestic product relies on oil, Asia Investment noted.

The International Monetary Fund (IMF) estimates showed that Kuwait is the sole country in the GCC region that is able to utilise its fiscal surplus despite the expected decline in revenues in 2015.

The Kuwaiti economy is ‘resilient’ and mainly relies on household consumption, said the report, adding that the country took steps to broaden government financial support and carried out slight amendments thereon earlier this year.

So far, the economy has steadied in the face of falling oil prices, but it may not be able to remain as such, as the halving in oil revenues began to suggest a negative swing in fiscal balance.

The report also said that staying at the current levels of public spending would lead to a fiscal deficit in the coming two years.